TL;DR: Fidelity Investments, one of the world’s largest financial services providers with more than $7.2 trillion in client assets, back in October of 2018 teased its spinoff, Fidelity Digital Asset Services, LLC (FDAS). Aimed at institutional investors, it was to be a custody and trade execution platform. However, nothing since the announcement has materialized. A report surfaced recently, alleging FDAS is set to launch officially in March of 2019.
Fidelity to Launch Bitcoin Custody Service in March
Talk these days in the cryptocurrency world is filled with nervous wonder at when institutional investors will finally take the plunge and enter the ecosystem. One highly anticipated move was signaled last year, when Fidelity revealed plans for its custodial service, FDAS.
At the time, Fidelity CEO Abigail Johnson explained, “Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors. We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”
Fidelity described the state of crypto and institutional investors as having a “gap in support
for institutions. This has created a paradox — while Greenwich Associates found that 70
percent of institutional finance executives believe cryptocurrencies will have a place in the
future of the industry,” yet they’re often legally prevented from doing so, the company insisted.
People Familiar with the Matter
Head of FDAS, Tom Jessop encouraged, “We started exploring blockchain and digital assets several years ago, and those efforts have been successful in helping us understand and advance our thinking around cryptocurrencies. The creation of Fidelity Digital Assets is the first step in a long-term vision to create a full-service enterprise-grade platform for digital assets.”
But little came of those plans, until now. Bloomberg reported people familiar with the matter at Fidelity are planning a rollout of the solution in just over a month. “We are currently serving a select set of eligible clients as we continue to build our initial solutions. Over the next several months, we will thoughtfully engage with and prioritize prospective clients based on needs, jurisdiction and other factors,” Bloomberg quoted from a rather vague statement issued by the company.
Custody is the linchpin of traditional finance in that a third party guards securities to prevent theft and accident, reducing risk in the process. Companies like Coinbase have rolled out their own custody products, but it appears Wall Street wants a larger player, one more established and trusted. Still other crypto enthusiasts believe legacy banks are the exact opposite of why bitcoin was developed, and find it maddening so many are rushing to encourage such moves.
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